Eric Holder, U.S. Attorney General, at a news conference on Feb. 5, 2013. Holder has prosecuted more alleged leaks by government officials under the Espionage Act than all his predecessors combined.

President Barack Obama is seeking new rules to allow federal agencies to fire employees without appeal if their work has some tie to national security, a move that advocates for whistle-blowers say may hurt efforts to keep government transparent and free from corruption.

Potentially thousands of positions would be covered and government watchdog groups say it may provide a new way to crack down on leaks by government workers.

In a little-noticed one-page memorandum on Jan. 25, Obama instructed the Director of National Intelligence and the Office of Personnel Management to propose standards for designating a position “national security sensitive.”

The president’s memo came out the day after a federal appeals court panel issued a 2-1 ruling that set aside an August court decision giving the government broad authority to remove employees from “sensitive” jobs without appeal. The full court will rehear the case, Berry v. Conyers, this year, and its decision may constrain the federal government’s power.

“There is so much secrecy, and employees have so few rights already in the national security bureaucracy,” said Tom Devine, legal director of the Government Accountability Project, a Washington-based whistle-blower advocacy group.

Attorney General Eric Holder has prosecuted more alleged leaks by government officials under the Espionage Act than all his predecessors combined. Six individuals have been indicted under the Espionage Act since Obama took office in 2009 — five by the Justice Department and one by the Department of Defense.

‘Spoils System’

“Most of our whistle-blowers are national security professionals,” Devine said. “If they get rid of the civil service system for those jobs, we’re not just going to be vulnerable to a national security spoils system — we’ll have it.”

Devine said whistle-blowers’ actions can save lives. He cited a case involving Franz Gayl, a Marine Corps science and technology adviser. Gayl raised questions in 2007 over the postponed delivery of mine-resistant armored vehicles for U.S. troops in Iraq and Afghanistan and later lost his security clearance.

While Gayl’s clearance has been restored, his access to offices where classified files are kept has not. Under the rulemaking being considered, Devine said, it’s possible that Gayl “will lose all the legal rights that have enabled him so far to survive a marathon campaign to purge him for embarrassing the Marines’ bureaucracy.”

Gayl said the administration is being pulled in opposite directions by those pushing for greater openness in government operations and advocates for greater secrecy in the name of national security.

Competing Camps

“I feel the president has come in with the best of intentions,” Gayl said in a telephone interview. There are “two very different camps exerting pressure on Obama from within.”

If a government employee “can’t appeal to a more dispassionate, thoughtful appeal authority, there’s a risk you will be drummed out of town,” he said.

Senator Charles Grassley of Iowa, the top Republican on the judiciary committee, said in a statement to Bloomberg News that he’s concerned about the administration’s aims because Obama has sent mixed signals about how he views whistle-blowers.

“If done properly, it could help ensure that a grossly disproportionate ruling from the federal circuit is reined in,” Grassley said of the rulemaking process. At the same time, Grassley said, Obama “in many instances has sought to silence whistle-blowers.”

‘Terrible Decision’

Pushing for rulemaking before the court re-hears the case “could be an attempt to signal to the full federal circuit not to overturn a terrible decision,” Grassley said. That would be “a disservice to whistle-blowers and the American taxpayers that benefit from the fraud and waste they uncover.”

One administration official, who was authorized to speak only on the condition of anonymity, said the timing of the Jan. 25 presidential memorandum one day after the court’s announcement was coincidental.

The main purpose of the memo was to make it clear to officials from the intelligence and personnel agencies that they are to work together on the rulemaking, he said.

The official declined to discuss the pending litigation or White House deliberations over the rulemaking.

Administration Leaks

The Obama administration has come under fire from lawmakers from both parties for leaking national security information that puts the White House in a favorable light and for pursuing prosecution of those who disclose classified information.

The controversy reflects the tension between two of the president’s avowed priorities: protecting classified information and defending democratic principles such as government transparency and whistle-blowers’ rights.

Republicans have complained that as Obama was seeking re- election, the administration was behind politically-targeted leaks. Those include media reports with details of the raid that killed Osama bin Laden and a foiled bomb plot tied to al-Qaeda in the Arabian Peninsula, as well as articles saying that Obama personally approved drone targets and ordered the “Stuxnet” cyber attack on Iran’s nuclear program.

Brennan Hearing

During this month’s confirmation hearing for White House counter-terrorism chief John Brennan, Obama’s choice to head the Central Intelligence Agency, Senator James Risch, an Idaho Republican on the intelligence committee, referred to an investigation of how media outlets last May learned details of how a double agent stopped an al-Qaeda plot said to involve bomb-maker Ibrahim al-Asiri. Brennan said he was cooperating with the Justice Department probe.

“It seems to me that the leak that the Justice Department is looking for is right here in front of us,” Risch told Brennan.

“I disagree with you vehemently, senator,” Brennan said. “I want to make sure whoever leaked this information that got in the press and that seriously did disrupt some very sensitive operational equities on the part of some of our international partners — that never should have happened.”

Brennan said such disclosures “damage our national security, sometimes gravely, putting these CIA employees at risk and making their missions much more difficult.”

Last month, Obama named Lisa Monaco, who led the Justice Department’s National Security Division and advocated aggressive leak prosecutions, to replace Brennan on the National Security Council once he begins at the CIA.

‘Sensitive’ Positions

In a Jan. 24 ruling, the U.S. Court of Appeals for the Federal Circuit vacated the panel decision from last August, which critics said gave the federal government excessively broad authority to remove thousands of employees from positions without cause or the ability to appeal through the Merit Systems Protection Board.

The jobs covered need not require security clearances. The federal government may designate them to be national security “sensitive” positions that one day might require a security clearance — a broader designation that can be applied to more positions.

An agency might “just willy-nilly decide to call a position sensitive,” said Angela Canterbury, director of public policy for the Project on Government Oversight, a nonpartisan watchdog group in Washington.

Broad Designation

While the total number of employees affected isn’t known, she said, there are a half-million workers in jobs tied to the Defense Department that are labeled as sensitive.

“The DNI is going to have an interest in making the designations as broad as possible,” she said. “OPM is going to have an interest in reducing its liability. I’d like to think someone in the process is going to be thinking about whistle- blower protections and the impact this could have on civil servants.”

The White House has called attention to steps the president has taken to promote disclosure of waste and fraud.

Obama last November signed into law the Whistleblower Protection and Enhancement Act, and last October he signed a directive calling for protections for whistle-blowers in the intelligence community who have access to classified information.

Under Berry v. Conyers neither the whistle-blower law nor the directive appear to protect federal employees who have “sensitive” jobs without security clearances, Devine said.

He said the designations affect civilian employees at the Department of Defense, including cashiers and stock clerks, as well as the majority of employees in U.S. attorneys’ offices and the offices of inspectors general. Employees who conduct financial reviews of corporate disclosures at the Securities and Exchange Commission also may be covered, he said.

Federal employees may not know that their jobs have been designated “sensitive,” and that therefore they cannot appeal if they’re later deemed ineligible to hold the job, he said.

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